Home Depot CEO: More fun to check e-mail now

Running a multi-billion-dollar retailer in good times would be one thing. But Home Depot CEO Frank Blake has done it during a historic recession.

The Atlanta-based big box chain lost about $13 billion in revenue from 2006 to 2009, and dropped from 2nd to 4th among the nation’s largest retailers. The company laid off thousands of employees, closed divisions and all but halted its U.S. expansion.

Against this backdrop, Blake beefed up bonuses for store employees, a move he saw as key to boosting morale and regaining customer confidence.

On Monday, he spoke with The Atlanta Journal-Constitution’s editorial board about the economy, how his company is doing, and why he didn't relish opening e-mail when he took the CEO job. Here is a portion of the discussion, edited for length and clarity:

Q: What do you see going forward in the economy?

A: We just reported a very encouraging first quarter, because we saw positive sales comps in the U.S. [for the first time since 2005]. But we also called out a few things that we are watching. Weather for us drives an awful lot of business, particularly in spring. Memorial Day is our Christmas season -- April, May, June is really our time of the year. We had some unusually good weather in the first quarter. So we’re not quite sure how that is going to play out.

Q: What is your short-term goal to improving on that profitability?

A: We continue to know we’ve got to improve our customer service. It starts with taking care of our associates. We are very proud of the fact that even in tough economic times, we maintained salary increases for our hourly associates and our 401(k) matches and actually increased bonuses. In 2009, we paid out more in success sharing [bonuses] than we did in 2007 and 2008 combined.

Q: Will you bring us up to date on your thinking on international expansion?

A: We only operate in three [overseas] countries. On the positive side, we’re the No. 1 home improvement chain in Mexico and Canada. We’ve got a team that’s working hard on China. We’re not going to roll out stores in China for the sake of rolling out stores. We want them to be profitable for our shareholders. We were talking about this just the other day internally. It isn’t unrealistic for a country that size with a market that different from the U.S. to take a few years to figure it out. And that’s what we’re doing. But our objective is to have a real presence in China. I wouldn’t expect to see us in Europe just because it’s a very mature market. The opportunities for us are China and how to take the success in Mexico and replicate it in the rest of Latin America.

Q: What’s the next most obvious market in Latin America?

A: The largest economy is Brazil, so that would be the one to start thinking about from an economic perspective. But we’re not on the precipice of doing something in Brazil. Look, we’ve been though a really bad economy. The housing market went through its worst recession in 60 years. Our first obligation is to make sure we have our operations in the U.S., Canada and Mexico right. To be expansionary, the first thing you need to do is protect the jobs and markets you already have. As we think about allocating resources, the first call is to fix up our stores. On the IT [information technology] side, we have a great IT leader from Wal-Mart and then eBay. We asked him where is Home Depot’s IT infrastructure compared to Wal-Mart. He said 1992. A lot of us were happy it was 1992 [laughs]. We’ve had to ask ourselves, do I take my investment dollar and build out new stores in China or our IT infrastructure? The answer has been the latter for us.